CFTC Alleges that Broker Alfred Gladstone Fraudulently Claimed That
He Made Millions In Profits When In Fact, His Customers Had Net
Losses Of Over $1 Million

Although 99% Of His Customers Lost Money, Broker Told Them That Their
Investments Were “a Sure Bet”

WASHINGTON -- The Commodity Futures Trading Commission (CFTC)
announced today the filing of an administrative action against Alfred
Albert Louis Gladstone (Gladstone) of Woodland Hills, CA, formerly a
registered associated person of various commodity firms. The CFTC charges
that Gladstone, while working at the Los Angeles Branch of commodity firm
FSG International Inc, fraudulently solicited customers to purchase
commodity options.

Specifically, the CFTC complaint alleges that, from approximately
January 1998 to May 2000, Gladstone fraudulently solicited customers by
falsely claiming that customers would realize large profits from trading
commodity options, minimizing the risks involved, and misrepresenting the
performance record of his customers. For example, as alleged, Gladstone
claimed that he was offering investors “a sure bet” and that
they could easily triple their investment. In addition, as further
alleged, Gladstone fraudulently reassured customers that his “sound
advice” would make them money, that all his customers were making
money, that he made millions for his customers, and that his customers
would be among the 10% of commodity investors that make “big
bucks.”

In sharp contrast to those fraudulent claims, the complaint alleges that
nearly 99% of Gladstone’s customers who closed accounts over a
two-year period lost all or virtually all of the funds they invested,
with trading losses totaling over $1 million dollars. Only one customer
made a profit, according to the complaint. As further alleged, at the
same time as the fraud, Gladstone was collecting commissions from his
customers’ trading. Gladstone’s commissions for 1999 alone
were allegedly over $1.2 million.

A public hearing has been ordered to determine whether the allegations
are true and, if so, what sanctions are appropriate and in the public
interest. Possible sanctions include cease and desist order, restitution
to defrauded customers, civil monetary penalties, trading prohibitions
and registration revocations, suspensions or restrictions.